Paychex 2015 Annual Report Download - page 43

Credit facility: In June 2013, we entered into a committed, unsecured, five-year syndicated credit facility,
expiring on June 21, 2018. Under the credit facility, Paychex of New York LLP (the “Borrower”) may, subject to
certain restrictions, borrow up to $750 million to meet short-term funding requirements. In July 2014,
supplemental agreements were executed increasing the maximum borrowing capacity under the facility from
$500 million to $750 million. The obligations under this facility have been guaranteed by us and certain of our
subsidiaries. The outstanding obligations under this credit facility will bear interest at competitive rates to be
elected by the Borrower. Upon expiration of the commitment in June 2018, any borrowings outstanding will
mature and be payable on such date.
There were no amounts outstanding under this credit facility as of May 31, 2015. During fiscal 2015, we
borrowed against this facility, for one day each, as follows:
$ in millions
Fiscal quarter
Amount
borrowed
Interest
rate
First quarter ........................................................ $100.0 3.25%
Second quarter ...................................................... $150.0 3.25%
Third quarter ....................................................... $ — —
Fourth quarter ...................................................... $ — —
Certain lenders under this credit facility, and their respective affiliates, have performed, and may in the
future perform for us and our subsidiaries, various commercial banking, investment banking, underwriting, and
other financial advisory services, for which they have received, and will continue to receive in the future,
customary fees and expenses.
Letters of credit: As of May 31, 2015, we had irrevocable standby letters of credit outstanding totaling
$43.0 million, required to secure commitments for certain insurance policies. The letters of credit expire at
various dates between July 2015 and April 2016, and are collateralized by securities held in our investment
portfolios. No amounts were outstanding on these letters of credit during fiscal 2015 or as of May 31, 2015.
Subsequent to May 31, 2015, the letter of credit expiring in July 2015 was renewed through July 2016.
Other commitments: We have entered into various operating leases and purchase obligations that, under
GAAP, are not reflected on the Consolidated Balance Sheets as of May 31, 2015. The table below summarizes
our estimated annual payment obligations under these commitments as of May 31, 2015:
Payments due by period
In millions Total
Less than
1 year 1-3 years 4-5 years
More than
5 years
Operating leases(1) ...................... $127.7 $ 37.5 $54.3 $27.4 $8.5
Purchase obligations(2) ................... 104.8 71.2 31.2 2.2 0.2
Total ................................. $232.5 $108.7 $85.5 $29.6 $8.7
(1) Operating leases are primarily for office space and equipment used in our branch operations.
(2) Purchase obligations include our estimate of the minimum outstanding commitments under purchase orders to
buy goods and services and legally binding contractual arrangements with future payment obligations. Included
in the total purchase obligations is $9.5 million of commitments to purchase capital assets. Amounts actually
paid under certain of these arrangements may be different due to variable components of these agreements.
The liability for uncertain tax positions, including interest and net of federal benefits, was approximately
$29.1 million as of May 31, 2015. Refer to Note I of the Notes to Consolidated Financial Statements, contained
in Item 8 of this Form 10-K, for more information on income taxes. We are not able to reasonably estimate the
timing of future cash flows related to this liability and have excluded it from the table above.
Certain deferred compensation plan obligations and other long-term liabilities reported in our Consolidated
Balance Sheets amounting to $62.4 million are excluded from the table above because the timing of actual
payments cannot be specifically or reasonably determined due to the variability in assumptions required to
project the timing of future payments.
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